Sample Category Title

Daily Pivots: (S1) 1.6662; (P) 1.6782; (R1) 1.6843; More...

Intraday bias in EUR/AUD is back on the downside as fall from 1.7062 is extending. Deeper decline would be seen to 55 D EMA (now at 1.6614). On the upside, above 1.6887 minor resistance will argue that the pull back has completed, and turn bias back to the upside for retesting 1.7062 high.

In the bigger picture, the rise from 1.4281 (2022 low) is in progress. Next target is 100% projection of 1.5254 to 1.6785 from 1.5846 at 1.7377. For now, outlook will stay bullish as long as 1.5846 support holds, even in case of another pull back.

Daily Pivots: (S1) 0.9564; (P) 0.9584; (R1) 0.9598; More...

Intraday bias in EUR/CHF stays neutral for the moment. On the downside, firm break of 0.9513 will resume larger down trend from 1.0095, towards 0.9407 low. Nevertheless, firm break of 0.9599 will bring stronger rise to 0.9646 resistance next.

In the bigger picture, medium term outlook is staying bearish as the pair is capped well below falling 55 W EMA (now at 0.9829). Down trend from 1.2004 (2018 high) is in favor to continue. Sustained break of 0.9407 will target 61.8% projection of 1.1149 to 0.9407 from 1.0095 at 0.9018. For now, this will remain the favored case as long as 0.9670 support turned resistance holds, in case of strong rebound.

Daily Pivots: (S1) 1.3489; (P) 1.3523; (R1) 1.3543; More....

USD/CAD's break of 1.3509 support indicates short term topping at 1.3638, on bearish divergence condition in 4H MACD. Intraday bias is back on the downside for pull back to 55 D EMA (now at 1.3411). On the upside, firm break of 1.3653 resistance should confirm that correction from 1.3976 has completed, and target a test on this high.

In the bigger picture, price actions from 1.3976 are viewed as a corrective pattern only. Upon completion, rise from 1.2005 (2021 low) would resume through 1.3976. Next target is 61.8% projection of 1.2005 to 1.3976 from 1.3091 at 1.4309. For now, this will remain the favored case as long as 55 D EMA (now at 1.3409) holds.

Daily Pivots: (S1) 0.6461; (P) 0.6485; (R1) 0.6508; More...

Intraday bias in AUD/USD stays neutral as consolidation from 0.6363 is still extending. Stronger recovery cannot be ruled out, but upside should be limited by 0.6615 resistance. Break of 0.6363 will resume larger fall from 0.7156 to 100% projection of 0.7156 to 0.6457 from 0.6894 at 0.6195.

In the bigger picture, current development argues that the down trend from 0.8006 (2021 high) is still in progress. Decisive break of 0.6169 will target 61.8% projection of 0.8006 to 0.6169 to 0.7156 at 0.6021. This will now remain the favored case as long as 0.6894, in case of strong rebound.

Daily Pivots: (S1) 1.0806; (P) 1.0873; (R1) 1.0910; More...

Break of 1.0854 minor support argues that rebound from 1.0764 has completed at 1.0944. Intraday bias is back on the downside for retesting 1.0764 low first. Firm break there will resume whole decline from 1.1274 to 1.0609/34 cluster support next. On the upside, however, break of 1.0944 resistance will argue that the corrective fall from 1.1274 has completed with three waves down to 1.0764. Further rally would then be seen to 1.1064 resistance for confirmation.

In the bigger picture, fall from 1.1274 medium term top is seen as a correction to up trend from 0.9534 (2022 low). Deeper decline would be seen to 1.0634 cluster support (38.2% retracement of 0.9534 to 1.1274 at 1.0609). Strong support could be seen there, at least on first attempt, to bring rebound. Yet, medium term outlook will be neutral for now, as long as 1.1274 resistance holds.

Daily Pivots: (S1) 1.2639; (P) 1.2687; (R1) 1.2720; More...

No change in GBP/USD's outlook and intraday bias stays neutral for the moment. On the downside, break of 1.2546 will resume whole fall from 1.3141 to 61.8% projection of 1.3141 to 1.2618 from 1.2799 at 1.2476. However, on the upside, firm break of 1.2799 will indicate that the correction from 1.3141 has completed with three waves down to 1.2546. Intraday bias will be turned back to the upside for retesting 1.3141.

In the bigger picture, for now, fall from 1.3141 medium term top is seen as a correction to up trend from 1.0351 (2022 low). Deeper decline would be seen to 38.2% retracement of 1.0351 to 1.3141 at 1.2075. Strong support would be seen there to bring rebound on first attempt. But outlook will be neutral at best as long as 1.3141 resistance holds, and consolidation from there is set to extend, until further development.

Daily Pivots: (S1) 0.8752; (P) 0.8778; (R1) 0.8811; More....

Range trading continues in USD/CHF and intraday bias stays neutral at this point. On the upside, firm break of 0.8874 will resume the rise from 0.8551. Next target is 0.9146 cluster resistance. On the downside, though, break of 0.8743 minor support will argue that rebound from 0.8551 has completed, and bring retest of this low.

In the bigger picture, rebound from 0.8551 medium term bottom is currently seen as a correction to the downtrend from 1.0146 (2022 high). Further rally would be seen to 0.9146 cluster resistance (38.2% retracement of 1.0146 to 0.8551 at 0.9160). Strong resistance could be seen there to limit upside, at least on first attempt. Nevertheless, medium term outlook is neutral at best as long as 0.8551 holds, until further developments.

Markets

(ECB) speak rather than data was the most important driver for trading yesterday, especially on European markets. ECB’s Schnabel, seen as belonging to the hawkish camp within the ECB, in speech gave quite some weight to recent slowdown in growth. She admitted that underlying price pressures remained too high, but stopped short of making an outright call for an additional ECB interest rate hike at the September 14 meeting. Markets considered it as an indication that chances on a pause in the ECB hiking cycle are growing. In a data-dependent approach, this at least wasn’t conformed by the EMU August inflation print. In line with national data, EMU headline inflation at 0.6% M/M and 5.3% Y/Y (unchanged from July) printed higher than expected. Core inflation eased from 5.5% to 5.3%. In this respect, ECB’s De Guindos also took notice of slower growth, but didn’t expect a big change to the ECB’s inflation forecast. Similar conclusion: the debate on whether to pause or to hike is wide open. As was often the case of late, the market reaction erred to a dovish interpretation. German yields dropped from the open and this trend continued throughout the session, closing between 9.6 bps (5-y) and 5.8 bps (30-y) lower. Contrary to what was the case earlier this week, US data yesterday didn’t leave any room for a dovish interpretation. Weekly jobless claims printed at a lower than expected 228k. July spending data were strong (0.8%) and the PCE deflators printed as expected (core 0.2% M/M; 4.2% Y/Y up from 4.1%). The Chicago PMI expectedly improved from 42.8 to 48.7. Yields still declined between 2.3 bps (2-y) and 0.6 bp (10-y). In this respect, we also keep an eye at oil continuing its recent rebound ($ 87 p/b cf infra). Lower yields this time didn’t really help equities (S&P -0.16%, EuroStoxx -0.42%). Lower EMU yields also caused EUR/USD to (more than) reverse Wednesday’s rebound (close 1.0843 from 1.0923). DXY rebounded to the 103.60 area. However, a modest decline in USD/JPY (145.54 from 146.24) indicated it was mainly euro weakness rather than any big improvement USD momentum. Global euro weakness also pushed the EUR/GBP cross rate further away from the 0.861 area tested earlier this week.

This morning, Asian equites modestly trade with modest gains (Nikkei +0.42%) , supported by further measure from Chinese authorities to support growth and a better than expected Caixin Manufacturing PMI (see infra).

Later today, the focus is on the US payrolls report. US job growth in August is expected to slow down further to 170k from 187K. The unemployment rate is seen unchanged at 3.5%. AHE are expected at to ease slightly further to 0.3% M/M and 4.3% Y/Y. We don’t have a strong arguments to deviate from the consensus. However, the bar for the payrolls isn’t that high and after this week’s repositioning quite some dovishness probably is already discounted. Markets only see a <15% chance of a September Fed rate hike. So, the downside in yields might be better protected. In this respect also keep an eye at the US manufacturing ISM. A minor improvement (47.0) is expected. We don’t expect the report to really be a game-changer, but a positive surprise might temper the recent dovish market bias. Except in case of unexpectedly weak US data, the dollar again might be better protected. In EUR/USD the attempt to break above the downtrend channel top since mid-July is rejected. The 1.0766 correction low is first support. Also keep in mind that US markets are closed for Labour Day on Monday.

News and views

The People Bank of China (PBOC) announced that financial institutions will need to hold 4% of their FX deposits in reserve instead of 6% starting September 15. The FX reserve requirement cut is one of many measures announced this week to prop up the economy (and support the currency). Others include a reduction in down payments for mortgages, higher personal income tax deductions related to care and education and lowered stamp duty for stock trading were the others. The Chinese Caixin manufacturing PMI this morning showed an unexpected increase from 49.2 to 51. The private survey adds to signs that the manufacturing slump could ease after similar signs from the official PMI yesterday (49.7 from 49.3). The Chinese yuan this morning tried to build on yesterday’s gain, with USD/CNY temporary below 7.25. The move didn’t last though (7.2650). Asian stock markets are paring early profits as well.

Brent crude oil prices yesterday closed in on their early August/YTD top above $87/b. Russian deputy PM Novak said that Russia and OPEC+ partners agreed on further export cuts with details to be released next week. Earlier on the day, a bigger than expected drop in US inventories already pointed to tightness on the crude market.

Swiss CPI rose 0.2% mom in August, matched expectations. Core CPI (excluding fresh and seasonal products, energy and fuel) rose 0.1% mom. Domestic products prices was flat 0.0% mom. Import products prices rose 0.8% mom.

Compared with the same month a year ago, CPI was unchanged at 1.6% yoy, above expectation of 1.5% yoy. Core CPI slowed from 1.7% yoy to 1.5% yoy. Domestic products prices slowed from 2.3% yoy to 2.2% yoy. Imported products prices rose from -0.6% yoy to -0.3% yoy.

Full Swiss CPI release here.

Short Term Elliott Wave view in GBPJPY suggests the rally to 186.75 ended wave 1. Pullback in wave 2 is currently in progress as a zigzag Elliott Wave structure. Down from wave 1, wave (i) ended at 185.38 and wave (ii) rally ended at 185.94. The pair extended lower in wave (iii) towards 183.35 and wave (iv) ended at 184.78. Final leg wave (v) ended at 183.34 which completed wave ((a)). Pair then corrected in wave ((b)) as another zigzag in lesser degree. Up from wave ((a)), wave (a) ended at 185.26 and pullback in wave (b) ended at 184.056. Wave (c) higher ended at 186.06 which completed wave ((b)).

Pair then resumed lower in wave ((c)) with subdivision as an impulse. Down from wave ((b)), wave (i) is expected to complete soon. Pair should then rally in wave (ii) to correct the decline from wave ((b)) high at 186.06 before turning lower again in wave (iii). Potential target lower is 100% – 161.8% Fibonacci extension of wave ((a)). The area comes at 180.5 – 182.6 where buyers can appear for at least a 3 waves rally. Near term, as far as pivot at 186.75 high stays intact, expect rally to fail and pair to extend lower.

GBPJPY 60 Minutes Elliott Wave Chart

GBPJPY Elliott Wave ChartGBPJPY Elliott Wave Video

https://www.youtube.com/watch?v=U8pa1dL-66o